Finance technology firm Fiserv has sweetened its takeover offer for U.K. counterpart Monitise by about 10%, an increase that may be enough to overcome shareholder opposition.
The $98 million, or 3.1 pence a share, offer announced Monday represents a 34.8% premium to the closing price for Monitise on June 12, the day before Fiserv made its original proposal to acquire the company for about $89.1 million, or 2.9 pence a share.
The first offer was rejected by shareholders as valuing Monitise at a fraction of its historic worth.
“Fiserv firmly believes that the increased and final offer constitutes full and fair value for Monitise given the financial outlook for the group and the structural challenge the group faces,” the Brookfield, Wisc.-based company said.
The Financial Times said the offer “should pave the way for a deal, after a miserable three years in which [Monitise] has lost some of its largest customers and issued a number of sales warnings.” The company’s shares rose almost 5% on news of the revised proposal.
Paul Mumford, senior investment manager at Cavendish Asset Management, which opposed the original offer, said he would “either vote for the thing to go through reluctantly or abstain” if no other bidders surface.
“If I felt a good chance of life after death, I’d vote against it, but nevertheless you’ve got to look at the commercial logic,” he told The Telegraph. “Just a shame that it’s not realistic, we’re being sold down the river.”
Like Fiserv, Monitise develops technology for the financial services industry, focusing on accelerating the digital transformation of banks and credit unions. But as the FT reports, it has “floundered as banks and financial institutions increasingly develop their own software in-house.”
Pre-tax losses for the year to June 2016 rose 7% to 243 million pounds ($268 million) and Fiserv’s revised offer values the company at 75 million pounds ($83 million), just 7.5% of its 1 billion pound ($1.1 billion) valuation in 2014.
Monitise’s board unanimously recommended the bid, saying it believes that “the strategic alternatives to a takeover . . . are accompanied by significant execution risk.”